A lot of problems in this world offer DIY options to fix the issue yourself. But the plumbing system is a lot trickier and is usually unable to be fixed properly by the average person. It’s a necessary business as most consumers and other businesses are not capable of maintaining their plumbing. Not to mention that a working plumbing system is essential to both the home and any business. From toilets to sinks and drains, running water safely flushing in and out of the system is a basic need. This creates a steady market for professional plumbers.
It may sound like a stable business to jump into, but exactly how do you start a successful plumbing business?
What to Know Before Starting a Plumbing Business
Starting a plumbing business can feel overwhelming, but working for yourself can be a dream come true. You may already be an experienced plumber, but if you don’t know the first thing about owning a plumbing business, you’ll wonder where to begin. Use this guide to carve your path as a plumbing business entrepreneur.
Step 1: Define Your Goals and Set Expectations
What is your objective in starting your own plumbing business? You can’t start thinking about the practicalities of owning your own business until you have a clear set of goals and expectations.
Why are you starting a plumbing business?
Are you looking for a larger income? Do you want to be your own boss? Is your family in need of more flexible hours in your work schedule? Have you always wanted to own your own business or start your empire?
Take the time to figure out the answer to this question because the reason behind starting your own plumbing business will be the foundation of your business.
What services will you specialize in?
It’s your job to ensure that pipes are well-maintained and up to any local building codes whether they be residential or commercial. You may want to work with residential properties in the homes of your customers. Plumbers also have the option to obtain corporate or commercial contracts while working exclusively with businesses for all of their plumbing needs.
Consider what you would like to be known for in the industry and your specialty will keep customers coming back for your services.
What’s the average plumbing business owner’s salary?
The salary of a plumbing business owner can vary greatly depending on the area and the success of your business. The median annual wage for plumbers in May of 2020 was $56,330. [1] If you are working for yourself as the sole employee of your company you simply need to deduct your yearly business expenses from your income to determine the net profit.
However, if you are hiring additional plumbers as employees for your plumbing business, each employee has their labor costs as well as the cost of insurance and benefits. More employees can allow your company to handle more jobs.
It’s important to remember all of these factors when determining your salary.
What do you need to start a plumbing business?
You’re not going to go out tomorrow and start your plumbing business with neither preparation nor necessities. But as a plumber operating your own business, what exactly will you need? From equipment and vehicles to licenses and education, there are some prerequisites to starting your plumbing business off right.
Plumbing equipment
If you don’t already have your own equipment, you need to invest in proper tools and anything you need to get a quality job done. Don’t forget about how you’ll carry said tools, and yourself, to each job either. You need to purchase a reliable work vehicle. Plumbers usually require a van or utility truck to hold all of the essential equipment and tools. As plumbers travel to customers, the business must be mobile with the ability to carry any tool necessary to every job. Below is a list of basic parts and supplies to keep on hand:
- Fittings
- Pipes (plastic and copper)
- A range of tap wear
- Inlet valves
- Thermostats
- Elements
- Hot water cylinder valves
- Crescents
- Grips
- Hacksaws
- Pipe cutters
- Cordless battery toolset (including: drills, saw grinder, impact diver, screwdriver)
When it comes to a vehicle and tools, this is not an area where you should look to cut costs. They are assets, not liabilities. The cost might add up quickly, but having quality tools and a dependable vehicle is crucial to the success of your plumbing business.
Plumbing experience
Customers want qualified plumbers. [2] Potential customers researching your plumbing business online are going to look first and foremost for your credentials. They want to feel they’re hiring someone with proper training, not an amateur performing shotty work with no technical education.
The first step to gaining trust with your potential clients is showcasing that you have the proper plumbing credentials. Even if, as a plumbing business owner, you don’t plan on doing all the nitty-gritty work yourself, leaving a lot of the hands-on work to your employees, having the qualifications to do the work yourself can be essential. For one, if there’s ever an issue, you will be able to step in and do the job yourself. Being the backbone of your plumbing business can make a world of difference in this regard. Owners can also use their knowledge to further teach employees or take on an apprentice.
On-the-job training can be essential to a budding plumber’s career. Certification programs or trade schools can help to secure an apprenticeship with a veteran plumber. Working side by side will allow you to sharpen your skills while shadowing a professional.
State required certification and plumbing license
Becoming a plumber doesn’t require a college degree. However, you will need a high school diploma or GED to be admitted to a trade school or certification program.
Plumbing does require an understanding of math, science, and tech. A vocational training program will help aspiring plumbers develop the skills needed to do satisfactory work.
Proper education is key to showcasing to customers that you are a professional with the certification to prove it.
Other certifications and education
The more qualifications that you or your potential staff members have, the more services you will be able to offer your customer base. Offering more services gives the business a greater potential to make more money. Securing the proper qualifications can expand your plumbing business to offer more specific services like maintenance of central heating, water recycling systems, and oil and gas-fired appliances.
How to get a plumber license
If you do not secure the necessary permits and licenses for your services, you may face hefty fines. Without the proper qualifications and documentation, your plumbing business may even be shut down by the authorities.
In most states, plumbers are required to obtain a plumbing contractor’s license, a plumbing license, and/or a plumbing permit. Additional state permits or licenses may be needed to operate a plumbing company. [3] You will need to research the specific requirements of your state for further instruction.
Step 2: Perform Market Research
To work successfully in your field, you need to become acquainted with the plumbing market. What types of clientele is your business looking for? What types of services are you going to provide? Break down the market in your area to figure out exactly what you want for your business, how you’ll compete, and how your business will fit the demands of your customers.
Define your niche and services
Choosing a specialty is all about you. You may want to offer a variety of services or maybe your experience has given you a preference. Once you have trained and worked as an apprentice, you’ll get a feel for what jobs best suit your talents and needs.
It’s also important to consider which task you enjoy the most. You may enjoy performing sewer line inspections. Perhaps you prefer to work residentially fixing leaky pipes or unclogging drains. You might desire larger projects such as home renovations. Perhaps you’d rather work with commercial clients.
Pick the specialty and services that are best for you and the types of clients for which you’re looking.
Define your target customers
What areas will you be servicing? Close to home? Perhaps further away in an area where there is a higher demand for plumbers or possibly less competition? Define where you’ll service, then you can define who you’ll service. Will your clients be commercial or residential? Individuals or businesses? Defining your target customers will help you create a business plan specific to the needs of your future clientele.
Step 3: Choose Your Business Structure
The three most common small business structures are limited liability company (LLC), partnership, and sole proprietorship. You need to establish a legal business entity to protect you from being held personally liable in the case of your plumbing business being sued. That said, task seriously and deeply which structure is right for you and the future of your business.
Limited Liability Company (LLC)
A limited liability company provides owners with personal liability protection. However, this business structure is still taxed similarly to a sole proprietorship or partnership. An LLC is typically the easiest structure for a plumbing business owner in regards to protecting personal assets. LLCs can be owned by one or more people.
Partnership
A partnership business structure consists of a business owned by more than one person. While the business may have multiple owners, a partnership is not formally organized like a corporation. Instead, the owners are responsible for filing the necessary taxes under the name of their partnership.
The partners will also be responsible for any actions taken against the plumbing business such as a legal suit. The owners’ personal assets are not protected and are at risk if the business is sued.
Sole Proprietorship
A sole proprietorship is an unincorporated business entity. When choosing this informal structure, it is important to note that the business will not be legally separated from its owner. This means that profits and losses will be reported on the owner’s personal tax returns. The owner will also be personally liable for all debts and risks associated with their plumbing business. Because of these important details, sole proprietorships are not typically advised for small business owners.
Step 4: Plan Your Budget
Every successful business depends on its detailed financial budget. You need to figure out starting costs as well as ongoing operational costs. Will you be financing your plumbing business on your own or do you have partners? Will you take out business loans or other kinds of financial assistance? Creating an in-depth budget will help your plumbing business build a foundation of success instead of it crumbling in financial ruin.
How much money do you need to start a plumbing business?
Starting a plumbing business is by no means cheap. You need resources and capital for a strong launch. To kick off your independent plumbing career, your biggest expenses will most likely be various equipment and a reliable work vehicle. Remember that these expenditures are investments for your plumbing business. It’s the age-old practice of spending money to make money.
Startup costs for new plumbing businesses
Before you start making money, you may need to spend some money. Below is a look at the startup costs associated with opening a plumbing company.
1. Plumbing business insurance
Business insurance is essential to operating a safe and lawful company. Your insurance will protect your business’s finances in the event of a policy-covered loss. There are a variety of insurance policies designed for businesses, adhering to specific risks to that particular business. If you’re not sure about the type of risks your business will be facing, it is best to invest in general liability insurance. This is the most common insurance coverage for small business owners.
You may want to look into additional policies depending on your specific needs and business operations. Workers’ compensation insurance is another source of security, especially if you will be hiring additional employees. Many states require employers to carry workers’ compensation. Be sure to look into your state and local laws for any additional insurance obligations.
2. Incorporation & licensure fees
Depending on your state, you may need to pay application and licensing fees to start your plumbing business. Research the requirements of your specific state and incorporate the associated fees into your budgeting plan.
3. Equipment, tools, and service vehicle costs
A reliable van or service truck may cost anywhere from several thousand dollars for a used vehicle to $30,000 or more for a new vehicle. Remember that buying used can save you a few bucks, but pre-owned equipment may need refurbishing and maintenance before use.
4. Uniforms
Investing in good work boots may carry a heavier cost than traditional shoes, but they are an investment for the health of yourself and your plumbing business. Quality boots can help you avoid injury and secure the safety of yourself and/or your employees. Work trousers made of thick material with pockets and loops to hold tools and accessories are also a good idea. Additionally, a utility belt may be necessary if you don’t wish to repeatedly travel between your truck and your service area. Padded knee pants with a comfortable fit are best as you’ll be doing the majority of work on your knees. You want to look professional, but you also want to get the job done without too much stress and discomfort to your body.
5. Other costs
In addition to the proper tools and parts for the job, your plumbing business will also likely require a laptop computer, office equipment, and a mobile phone. The cost of all of this can exceed $5,000 depending on what you may already have, models, and if you are purchasing new or second-hand items.
Budget your money
Ongoing expenses should be minimal, but you need to implement a detailed budget for your business. You will need to perform routine maintenance on any vehicles, as well as your tools, all of which may eventually need outright replacement. Additionally, you need to pay any office expenses such as rent, utilities, and insurance.
Budget your time
Remember that time is money. As a business owner, you need to be on top of your time management skills. If you’re out doing the actual hands-on plumbing work, you also need to do the office work to maintain your business’s finances and operations. Make a list of everything you will need to do on an ongoing basis and come up with a schedule to ensure nothing falls through the cracks.
Insurance, taxes, and other expenses
Staying on top of your finances is vital for any successful business owner. You’re going to need help whether that be in the form of an accountant, accounting software, or both.
Just like any other business, your plumbing business needs to pay its fair share in taxes. An accurate accounting system helps ensure the business isn’t hit with large back payments, interest rates, or fines. Hiring an accountant can help to save you time and money while ensuring your business is handling its financing properly.
Additionally, you will need to purchase general liability insurance. It may also be a good idea to take out additional policies such as a general business owner’s policy, income protection insurance, and worker’s compensation. Remember that being your own boss has a lot of perks, but also a lot more liability, and you won’t have the security of a big company to rely on if any unfortunate circumstances occur.
Equipment and vehicle insurance
Your plumbing business also needs to secure insurance for both your work vehicle and your equipment. In case of any accident, you want to ensure you have the means to replace your expensive items. After all, they’re essential to your business.
If you can’t work without it, make sure it’s properly insured for if and when tragedy strikes.
Step 5: Write Your Plumbing Business Plan
Just as Rome wasn’t built in a day, businesses don’t become successful overnight. And you can’t start the road to success spontaneously with no semblance of a map to reach your destination. All businesses need a business plan. Your plumbing business won’t start itself, grow itself, or succeed all on its own. What it needs are a strong business structure and a well-thought-out strategy. Your business plan should include:
- Financial projections
- Growth opportunities
- Marketing strategies
- Financing
- Short- and long-term goals
Plumbing pricing: how much will you charge?
Pricing your services can be tricky. You want to set prices that are competitive with your competition while highlighting the quality of your work. Some clients will look at the price and nothing else, always opting for the cheapest labor in town. However, low prices may attract cheap clients that are always looking to cut corners and save a buck by any means. Higher prices may attract clients looking for a higher quality of work. Take the time to analyze your work and come up with a fair price for the quality you deliver.
Before you secure any clients or do any actual plumbing work, you need to determine what services you will offer and establish a pricing plan for each service. Break down the cost of each service based on labor and supplies. Using your determined formula, come up with contract or agreement templates for your potential customer. You want consistency in your pricing so customers know what to expect. This helps you avoid poor online reviews or complaints among customers with pay discrepancies.
Plumbing businesses typically charge a flat rate for jobs. They may also add on the cost of the material. Some businesses choose to charge clients by the hour or track additional charges for emergency, rush, or off-hour services. Customers may also be charged a flat service fee in addition to hourly or per-job flat rates.
The average price for plumbing services typically falls between $160 and $430 for a standard job.
Name your plumbing business
Choosing the right name for your plumbing business is no easy task. It sums up the entirety of your company and is often be the first thing potential customers see when researching your business. Maybe you’ll use your name or maybe put good vibes into your customer’s minds with a glowing adjective to highlight your expertise. Whatever name you choose, there’s a lot to consider before making your final selection.
How to name your business
You want a professional name that speaks to your credibility. It may also be a good idea to have your name indicate your plumbing services. You may already have a name in mind or are starting to brainstorm, but there are some things you may want to consider before settling on a name. If you are going to operate as a sole proprietorship, you may want to operate under a business name different than your own to keep your professional and personal lives separate.
Things to consider when choosing a business name
You should check social media platforms, your state’s business records, federal and state trademark records, as well as web domain availability. You want to ensure you’re choosing an available name and scope out any naming competition before legally registering your business name.
Additionally, having the website domain name available for your business will be essential to operations. You may want to acquire the rights as soon as possible.
Step 6: Get Your Paperwork and Finances in Order
While a lucky few might be able to fund the start of their plumbing empire on their own, the majority of entrepreneurs need to secure a small business loan. Banks often provide small business experts to guide potential borrowers through the process. However, it’s important to go in with a detailed business plan to show potential lenders that you’re serious about the success of your plumbing business.
This shows the bank that you not only have the intention to pay back your loan, but you have also done your homework instead of showing up unprepared. It speaks to the level of work you will put into your future plumbing business and your commitment to the venture.
Step 7: Register Your Business and Obtain a License
The red tape for operating a plumbing business will all depend on your state requirements and local laws. To get up and running, familiarize yourself with the specific stipulations in your area. Each state will require a different license, permit, and other essential requirements.
You can look to your Secretary of State or licensing board for more information. Do not start business dealings with any clients until you have obtained and filed the proper paperwork for registering your plumbing business or you may face hefty fines.
Step 8: Open a Business Bank Account
When owning a business, you need to set up protection for your assets. You should open bank and credit card accounts specifically in your business’s name. This ensures that none of your assets can be taken in the event of your plumbing business being sued. Also, building credit for your business will also help you to finance your business and obtain lower interest rates and higher lines of credit.
Keep detailed records of your various outgoing expenses and incoming payments to track the financial performance of your plumbing business.
Step 9: Hire Your Team
Will you be the sole employee of your company or are you going to hire a team of employees to do the work? Maybe you’re looking to take on an apprentice. You may want an office employee to handle the logistics of your plumbing business or manage the backend of customer needs. Perhaps you require an accountant.
Think about how much work you can realistically manage on your own and how much needs to be delegated to others. From there, determine your business’s needs and how many, if any, employees you are interested in hiring.
Hiring employees vs independent contractors
Do you need someone full-time or part-time? Long-term or short-term? What type of salary or wages will you be able to afford?
When it comes to independent contractors, you won’t have as much say over their work. If the job requires no supervision or is short-term, contractors may be a better option. You will be obligated to pay for the services you agreed to purchase, but that’s not the same as being their outright boss. The major difference between employees and individual contractors is in taxation. Familiarize yourself with the legal bounds while determining your staffing needs.
Step 10: Set Up Payment Software for Plumbing Contractors
Any contractors you employ will want to utilize a secure system to get paid. Utilizing current payment software for all of your business’s outgoing payments is essential. Investing in payment software can help you pay contractors on time while tracking any incoming or outgoing payments associated with your business.
Utilize field service management software for easy invoicing
You need a field service management system for invoicing your customers and managing your schedule while you’re in the field. Getting paid is essential to any business, so research the existing software and choose the best option for your daily eInvoicing business needs.
Step 11: Market your Plumbing Business
The odds of owning the only plumbing business in town are going to be quite slim. Therefore, you need to scope out the competition. Define their strengths and weaknesses to determine how your plumbing business can be better. Analyze your competitors’ websites to find a way for your plumbing business to set itself apart from the other plumbers in the market. It’s not about copying the competition. It’s about identifying a path to giving your plumbing business its own identity.
Social media
Every business in today’s market can benefit from a healthy online presence. First and foremost, your plumbing business needs a professional website. Customers should be able to go to your business’s webpage and see credentials, understand pricing, inquire about a quote, and more.
In the modern world, social media is essential to advertising. Facebook, Instagram, TikTok, and Youtube can all help grow your plumbing business and get your name out to as many potential customers as possible. You may want to join local groups for your area and advertise services to subscribers.
In regards to plumbing, pay special attention to local reviews and recommendations. Look into advertising your services or creating business accounts for Yelp, Angie’s List, and HomeAdvisor.
Physical advertising
Most plumber businesses acquire clientele through referrals or targeted marketing like direct mail. You may want to purchase a mailing list of individuals who have previously required plumbing services within the last six months to one year. After obtaining this list, you can use snail mail to offer promotions or simply advertise your services.
Flyers
Hanging flyers around town in public spaces or at other businesses with the owner’s permission can be another great way to advertise your services. These flyers can even provide potential customers with QR codes advertising promotions for your plumbing business or taking them directly to your business’s website.
QR codes can be further utilized by your plumbing business to implement a mobile, contactless payment method.
Business Cards
Leaving a business card with your clients and asking satisfied customers to pass along your business card can help create more business for you. You may also ask to leave a stack of cards with local non-competitor businesses for their customers to pick up. A business card gives an extra sense of professionalism while advertising essential contact and service information in one place.
Customer referrals
If you’re walking away from a job with a satisfied customer, ask for them to refer you to friends, family members, coworkers, etc. You may even want to ask them to leave you a good review online whether that be on your business’s website, Google reviews, or Yelp page.
It may be a good idea to employ a referral program. You can offer discounts or rewards to customers who refer additional clients. This will not only grow your client list but help retain your loyal customers via discounts and rewards.
Personal connections
The best network you have at the start of your business is your family and friends. At some point, most households need the assistance of a good plumber. Let friends and family know about your plumbing business and its services. If they become clients, ask them to help you spread your services by word of mouth and consider your business for all future plumbing needs.
Starting a Plumbing Business: Final Thoughts
Starting any kind of business is no easy feat. However, being your own boss can be endlessly rewarding, both in the profits rolling in by way of your mobile credit card payment solution and in the freedom it offers. If you’re an experienced and professional plumber looking to expand your entrepreneurial skillset, starting a plumbing business may be right for you. Taking the time to define your business following these 11 steps will set you on the path to becoming the owner of a successful and long-lasting plumbing business.
Sources:
- U.S. Bureau of Labor Statistics. “Plumbers, Pipefitters, and Steamfitters“. Accessed January 25, 2022.
- Best Accredited Colleges. “How to Become a Plumber: Education and Career Roadmap“. Accessed January 25, 2022.
- U.S. Small Business Administration. “Apply for Licenses and Permits“. Accessed January 25, 2022.
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